Johnson & Johnson pays $2.2B over claims

Tuesday

Nov 5, 2013 at 12:01 AMNov 5, 2013 at 6:16 PM

The company had been accused of promoting antipsychotic drugs for unapproved uses.

David Sell

WASHINGTON — Health care giant Johnson & Johnson agreed Monday to plead guilty to criminal charges and pay $2.2 billion to settle allegations that it illegally promoted the use of its antipsychotic drugs for unapproved uses, including for children and the elderly.

The scheme, according to the U.S. Department of Justice, included payments to doctors to write prescriptions for unintended uses, sometimes for at-risk children in foster homes, and kickbacks to a pharmacy company that served elderly patients suffering from dementia in nursing homes.

The announcement was made Monday morning in Washington. The U.S. Attorney's Office in Philadelphia played a key role in the investigation, which focused on the misuse of drugs such as Risperdal and Invega that were approved mainly for the small population of patients suffering from schizophrenia. Such drugs were promoted for other medical problems to increase sales.

In 2012, GlaxoSmithKline agreed to plead guilty to three criminal counts and pay $3 billion to settle allegations of illegal marketing of drugs and for withholding safety information about its diabetic drug Avandia.

Monday's agreement involved criminal and civil charges and whistle-blower lawsuits related to Risperdal, Invega and several other drugs. In 2009, Kentucky-based Omnicare Inc., agreed to pay $98 million to settle civil claims by the Justice Department and several states that it took kickbacks from J&J.

The deal comes nearly 10 years after federal investigators first issued a subpoena to J&J regarding Risperdal.

The company, based in New Brunswick, N.J., is known for iconic consumer products such as Band-Aids and baby shampoo, but prescription pharmaceuticals are big moneymakers for J&J.

In more than a decade, few drugs have been as lucrative as Risperdal, first in pill form and later as a long-acting injectable called Risperdal Consta.

The high-water mark for Risperdal products was 2007, when the pill version generated $3.4 billion in sales and the injectable brought in $1.1 billion, according to J&J financial reports filed with the Securities and Exchange Commission. That represented more than 18 percent of J&J's nearly $25 billion in pharmaceutical sales for 2007.

The pill version completely lost patent protection in the U.S. in 2008, has several generic competitors, and is no longer promoted by J&J. The company's injectable, Risperdal Consta, and the two versions of Invega generated $2.8 billion for all of 2012, and $2.3 billion through the first nine months of 2013.